Jul 14, 2014 - 2:45pm

USDA Cherry Seizure Program is the Pits

Cherry processor battling USDA restrictions in court

When I saw this story about an administrative lawsuit “pitting” a small Michigan farmer against the U.S. Department of Agriculture over the agency’s archaic regulation impacting tart cherries, I got a sense of deja vu. Or should I say—deja fruit.

Ron French of Michigan’s Bridge Magazine writes:

[T’he tart cherry industry is told by the U.S. government how much of their product they can put on the market. The Cherry Industry Administrative Board (CIAB), operating under the auspices of the Department of Agriculture (USDA), sets restrictions on the percentage of the tart cherry crop that can be sold. Some years the share of the market restricted from market is low, like this year, which has a 10 percent restriction. In 2009, it was a whopping 65 percent.

“It’s crazy,” said Bill Sherman, whose company, Burnette Foods, an Elk Rapids food processing company, is suing the U.S. Department of Agriculture to upend a system it claims is outdated and hurting growers. “This is New Deal legislation when farming was 40 acres and a mule,” Sherman said. “Agriculture is nothing like that now.”

Ah yes. Marketing Order programs.

Throughout 2012 and 2013, we closely followed a similar case involving the Raisin Marketing Order.

The Raisin Marketing Order program, operated by USDA requires that as a condition for “letting” farmers sell their raisin crops in interstate commerce, the federal government can take a portion of their crops – as much as 47% in some years -- often for no payment at all, or below the cost of producing the raisins.

Similar programs cover a variety of other agricultural products, such as walnuts, almonds, prunes, tart cherries, and cranberries.

This raisin case (which garnered a ton of media coverage, including a segment on The Daily Show with Jon Stewart) involved California growers Marvin and Laura Horne, and made it all the way to the Supreme Court.

In June 2013, the Supreme Court held that the raisin farmers could use the Constitution’s Takings Clause to defend their property rights in the enforcement proceedings the government initiated after the Hornes refused to hand over their raisins. (The Constitution’s Takings Clause says that the federal government must provide just compensation when the government takes a person’s private property.) 

The Ninth Circuit had said the Hornes couldn’t use the Takings Clause as a defense, and that if the Hornes wanted their raisins (or the cash equivalent) back, they would have to pay the fines and then file a separate lawsuit against the government to try to get their money back. 

The case was sent back to the lower court and, in May, the Ninth U.S. Circuit Court of Appeals ruled that the USDA taking a farmer’s harvest does not violate the Fifth Amendment’s Takings Clause as long as the government aims to drive up crop prices.

Which brings us back to tart cherries. The USDA’s Cherry Industry Administrative Board (CIAB) , according to its website, “is a marketing order created at the request of, by the vote of and at the expense of the tart cherry industry.  It was created to assist the industry in dealing with the erratic production cycle of red tart cherries and to improve returns to the growers and processors of red tart cherries in the United States…The marketing order applies to all states across the country that produce commercial crops of red tart cherries. This includes the states of Michigan, New York, Oregon, Pennsylvania, Utah, Washington and Wisconsin."

French notes in his article that:

Michigan tart cherry growers are shackled by those restrictions more than most. There are no restrictions on sweet cherries – the kind you buy in the fresh fruit section of Meijer. The restrictions don’t even apply to all tart cherries - there are no restrictions on tart cherries grown in Oregon or Pennsylvania, or on imported cherries….

The restrictions don’t apply directly to cherry growers, but to cherry processors – the companies that buy tart cherries and can them (primarily for pie filling) or freeze them for processing into other foods, such as cherry juice.

Even more egregious is the fact that the program is causing cherry growers to actually leave cherries on the ground to rot. In 2009, 30 million pounds of tart cherries were left on the ground nationwide, according to French.

And, as a consequence of higher consumer demand and a delicate, even unpredictable crop, processors are increasingly turning to importing cherries from other countries, in particular Poland and Turkey.

Burnette Foods happens to sell fresh—not frozen—cherries to processors, which puts the third-generation family farm directly under the USDA ax. In the lawsuit, Burnette Foods asks that the USDA tart cherry restrictions be removed because the restrictions don’t impact every processor equally, and don’t take into account sales of imported cherry products.

“This is not an incentive to grow more,” says Bill Sherman, president of Burnette Foods. “This actually makes it more difficult to grow more and I know there are people here who would like to plant more cherries, and frankly there are processors who would love to process more cherries, including Burnette Foods…You have to have some guts to take on a fight like this and I guess I felt like Burnette Foods have been pushed around enough.”

I’m sure that’s a sentiment that Marvin Horne would agree with. 

About the Author

About the Author

Sheryll Poe is a former senior writer at the U.S. Chamber, who covered public policies affecting businesses including the three "T's" - transportation, trade and taxes.